Here’s what you’ll find in today’s edition:

• We take a stab at answering the question all stock market investors are asking. 

• The institution-focused chatter set to take center stage at this week’s Digital Asset Summit.

•  It’s FOMC week. Here’s what else we’re watching.

Is this the bottom?

We hope you got some rest over the weekend, because US equities are already off to another tumultuous start this week. 

After entering a correction last week but then hitting a year-to-date high on Friday, the S&P 500 whipsawed today. At 2:30 pm ET it had managed to get back into the green, trading 1% higher. 

The Nasdaq Composite was also faring pretty well, trading 0.8% higher at that time. 

With recession fears mounting (and signals flashing), it begs the question: Have US stocks bottomed? 

The data (mostly) says no. Let’s take a look: 

The VIX is hovering around 21

Any value at or above 27.3 (one standard deviation above the long-running average) indicates heightened volatility. Generally, stocks perform well after volatility spikes. 

In mid-December, the VIX hit 27.6 after the Fed cut interest rates by 25 basis points. A week later, the S&P 500 had gained almost 3%. Volatility today is hovering around 19, but a bigger selloff in Big Tech and/or disappointing inflation data could send the VIX higher. 

We actually saw almost this exact scenario play out last week. The VIX hit 27.9 on Monday afternoon and then the S&P 500 corrected later in the week. 

The volatility indicator is still hovering higher than its long-running average (19.5). But it’s going to have to remain elevated for a lot longer (think months) for this to really signal a low for stocks. 

The S&P 500 is trading 19.9x forward 12-month earnings estimates

In other words, the S&P 500 today is trading around 20x the projected earnings of its companies in the next year. 

For context, pre-2008 crash, the forward P/E for the S&P 500 was around 15x. During the crisis, it had dipped to around 10-12x. In 2022, when recession fears were on the rise, the S&P 500 was trading about 15x forward earnings estimates. 

So we’re still in OK-territory here. Or, at the very least, the market has priced in, to some extent, a slowdown. This was the case during the 2020 recession because earnings estimates decreased so much when the pandemic hit. 

On the other hand, we know consumers are worried. Consumer sentiment fell 11% in March and is down 22% since December, per University of Michigan data. 

I haven’t heard much talk of it recently, but perhaps we are inching back toward “vibe-cession” territory, à la 2022.

While I’ll never be the one to tell you when it’s time to buy stocks, I feel confident in saying you should not expect the Fed to come in and save the day — at least not this week. The March FOMC meeting kicks off on Tuesday and central bankers are overwhelmingly expected to hold interest rates steady. 

The question thus remains: How long will this pause last? And, relatedly: How low will stocks have to go for Powell to step in? We know Trump isn’t planning any bailouts. 

Come talk markets with us in person this week at the Digital Asset Summit in NYC.

— Casey Wagner

Looking for a companion for your morning cup of coffee? Join Katherine Ross for the Empire newsletter — top crypto news and analysis delivered to your inbox weekdays at 8:45 am ET. Inform your day in crypto with Empire.

The number of consecutive days crypto investment products have collectively tallied net outflows, according to CoinShares data. This marks the longest negative streak since CoinShares started recording this in 2015.

Roughly $5.4 billion have left bitcoin products alone over the past five weeks. BTC was down about 14% from a month ago, as of mid-day Monday. 

Given the price correction and outflows, total crypto product assets under management have declined by $48 billion.

You’ve probably heard by now about Blockworks’ Digital Asset Summit. Well, it kicks off tomorrow.

It seems to be a good time given the mix of optimism and uncertainty — in crypto and the broader economy. That hopeful-volatile blend should spur more interesting discussion.

So we have some dichotomies to work through. Like BlackRock adding bitcoin exposure to its alternatives-focused model portfolios as bitcoin ETFs have endured $5 billion of net outflows in recent weeks. 

Or a president who wants to build “the crypto capital of the world” while simultaneously implementing policies that are sending the stock market (and BTC price) lower. Not to mention the whole Trump memecoin launch that made eyes roll around the industry. 

Bo Hines, executive director of the White House’s Presidents Council of Advisers on digital assets, can hopefully share insight when he hits the DAS stage tomorrow. US Rep. Tom Emmer will speak 24 hours later on what it’ll take to get crypto legislation across the finish line this year. 

The institutional presence at DAS will be ample. A step like walking back the SEC’s SAB 121 is already set to pave the way for banks and brokers to custody spot crypto — and legislation (on stablecoins and market structure) is apparently on its way. 

Command + F the event agenda…type in “inst” and you’ll get plenty of hits. 

LMAX Group CEO David Mercer is set to sort through headwinds and tailwinds in the new era for institutional crypto. Eric Peters, who leads Coinbase Asset Management and One River Asset Management, will detail which institutions are actually buying this cycle. 

Bloomberg Intelligence’s James Seyffart will guide a discussion on the next wave of institutional crypto products. Franklin Templeton’s Sandy Kaul and Visa’s Catherine Gu are headliners on the “Institutionalization of Crypto” session.

BlackRock CEO Larry Fink has called tokenization “the next generation for markets.” The panel I’m moderating Thursday is likely to feature a debate on which assets are worth bringing onchain, and broader TradFi adoption there.

We’ll pass along what we learn in DAS-focused FG editions over the next three days. Be sure to follow our X accounts too (Blockworks, Ben and Casey) for updates throughout.

— Ben Strack

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Happy Monday! We hope you spent your weekend traveling to NYC for the Digital Asset Summit!

Aside from the conference, there’re a few things to keep an eye on this week: 

• Housing starts and building permits data will come out Tuesday. These figures will give us an idea of how builders and homebuyers are thinking about tariffs and interest rates. 

• The headline event is of course the March FOMC decision. We aren’t expecting a rate cut, but a new dot plot will give us an idea of where central bankers expect to end the year. The market will want confirmation that the committee is still planning on two 25-basis points cuts in 2025. 

• As always, initial jobless claims for last week will be published Thursday. After we saw a decline in the latest data for first-time filers, a continuation of this trend would help assure markets — and central bankers — that the labor market is in healthy territory. Keep in mind, though, that we’re expecting to soon see DOGE layoffs reflected in the numbers.

— Casey Wagner

• Bitcoin hovered around $84,100 at 2:15 pm ET — up nearly 2% from a day ago. 

• CME Group’s solana futures contracts were set to go live today. Ben wrote about their potential impact last month. 

• Canary Capital Group filed for an ETF that would hold SUI. The firm has filed previously for ETFs that would hold XRP, SOL, HBAR, LTC and AXL. 

• At DAS, Forward Guidance’s own Felix Jauvin is set to interview Allianz Chief Economic Advisor Mohamed El-Erian (again) and Bitwise CIO Matt Hougan. Those will be available on YouTube, or wherever you listen to podcasts.